Matt Shanahan (Waterford, Independent) | Oireachtas source

I thank Cáit Nic Amhlaoibh, our parliamentary assistant, and my Regional Group colleagues for their work on this motion.

It is bad form that six of our speakers this morning were speaking to a health Minister as opposed to a Minister the Department of Enterprise, Trade and Employment. Furthermore, not one Fine Gael Deputy has taken part in this debate. It speaks volumes for the party that claims to be all about business in this country.

Our motion has three core asks and they are simple. We call for the reintroduction of the 9% VAT rate for the food and hospitality sector, an extension of the 8.8% employer's ceiling on wages up to €495 per week and the establishment of a Government task force, as outlined by Deputy Naughten, to get to the heart of the challenges facing small business. We are calling for these measures because we recognise the increasing cost burden on small business, many of which are as a result of Government policy. Government is the most material contributor to the cost of doing business in this country. Legal costs, insurance, costs of credit, local authority charges, energy, the national minimum wage and tax compliant VAT are all set by Government and cannot be bid downwards by small business.

VAT is a sales tax, and we have one of the highest VAT rates on food among EU countries. In most peer economies, VAT ranges from 5% to 9%. On wages, large enterprises of 250 workers or more, which exclude public servants, now make up 40% of those employed in Ireland. Public servants make up an additional 18% of the employed population. This group of the working population has robust access to job security and pay and conditions. A stable revenue base is also the norm for this group. However, the other 42% of the working population is represented by the small and medium enterprise sector. These businesses tend to suffer more fragmentation, more domestic competition and more competition in margin retention. To understand that, the Minster of State just needs to look at how they grow. They often remain small simply because the market offering they have is small. Nonetheless, they have significant value in terms of community employment, as well as their amenity and social offering and the cultural value they create and offer to this country. They are often an intrinsic and significant component of our tourism offering.

As has been outlined, many small businesses face rising costs and they are not recoverable for marginal increases. These businesses are therefore going under. The minimum wage increase and addition to employer PRSI have added €3,152 to the annual cost of hiring a single employee at minimum wage level. For many employers, this wage increase has also increased further because of the relative effect on other employees. Employers accept that people must be paid an adequate wage. The problem for small business is that all other costs are also increasing, and business demand and customers' ability to pay is finite. These increased costs cannot be borne by small businesses.

The public-private sector pay gap is one of the largest in Europe and it distorts the thinking of Government. Small microbusinesses cannot compete with pay levels benchmarked against high-paid civil servants and large FDI in the technology and pharmaceutical sectors. The Government has to accept this policy reality in its policy formation. I revisit the need for the small business sector to be represented at the high-level group within the Labour Employer Economic Forum, LEEF. I have repeatedly asked for this and clearly see that the voice of small business is not being heard.

I turn to other points of note. The Department of Finance advises that its Skillnet allocation cannot go up this year because of fiscal spending rules. Meanwhile, there is more than €1.4 billion sitting in the National Training Fund. If the money cannot be spent on training, the 1% training levy should be suspended until it can. Businesses have also been paying 0.5% PRSI for the statutory redundancy fund since 1979, even though a later Minister, Joan Burton, eliminated the statutory redundancy rebate. I ask again that the Government either reinstate the rebate or knock 0.5% off employer PRSI. Some of the short-term SBCI loans drawn down during Covid are maturing and borrowers need time to repay. I ask that the Government take a similar position to this accrued debt, as it has done under the warehoused debt provisions.

On radio in recent days, a Fine Gael Deputy said of our motion that we were being populist. Is it now populist to listen to businesses in our constituencies that are crying out for recognition of the challenges they face? Is it populist for TDs to suggest that TDs outside of Government might have policy ideas that reflect the needs of our constituents?

Is it populist for us to state that a significant proportion of our entrepreneurs, young people and business owners and managers feel that Ireland is fast becoming a place where they are not encouraged to start, develop or maintain a viable small business? It is obvious to me that many who are framing policy in this House have no experience of the costs or challenges involved in starting or maintaining a small business. They are obviously also oblivious to the impact of Government-sponsored charges and levies.

The requests in our motion are not populist. They are the minimum required to show support to the small and medium-sized business sector. I ask the Minister of State to encourage the Government to listen intently and implement the supports we are calling for. If he cannot do that, we will ask the House to vote on the motion.

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